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Snyder Signs $49B Budget With Few Line-Item Vetoes

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LANSING (AP) – Gov. Rick Snyder signed a $49 billion state budget on Thursday that sets aside more money to fix deteriorating roads and provide preschool to low-income children, but does not include – for now – his call to expand Medicaid eligibility to hundreds of thousands of Michigan adults.

The Republican governor called the spending plan “very solid” and said it is the third straight year that a “structurally balanced” budget is done in June, months before the Oct. 1 start date.

The 2013-14 budget is nearly 1 percent bigger than the current year and has no general tax increases.

Overall spending for public K-12 schools will increase about 3 percent, and public universities cannot raise tuition more than 3.75 percent without losing some funding available to them.

The budget plan blocks Snyder’s administration from paying to implement a set of more rigorous national standards in reading, writing and math – standards he supports – until the GOP-led Legislature says it is OK. But about 16,000 more disadvantaged 4-year-olds will be eligible for preschool thanks to an influx of $65 million, part of Snyder’s plan to double the Great Start Readiness program over two years.

“This is a huge step forward in terms of early childhood education in our state,” he said before signing two budget bills while flanked by Republican legislative leaders and appropriations chairs in his office across from the Capitol. “I hope we’re going to back here next year talking about another $65 million so we can make that whole waiting list go away.”

The budget includes an additional $350 million to fix deteriorating roads and bridges – a significant one-time expenditure due to higher-than-expected income tax collections but far short of the $1.2 billion a year that would be raised under Snyder’s stalled increase in gasoline taxes and vehicle registration fees. Negotiations on road funding will continue this summer, but legislators are not expected to vote on anything for months, if at all.

Snyder’s request to expand Medicaid eligibility to more poor adults also is not in the budget, though lawmakers are working to approve Medicaid expansion before they break next week. The House approved the expansion Thursday night on a 76-31 vote.

“There’s still work to be done. I think this is a very solid budget, though, and I’m proud to be standing here today,” Snyder said.

Another $75 million is put into savings, bringing the rainy day fund to nearly $600 million. It was nearly empty when Snyder took office, and he said he ultimately wants at least $1.2 billion in savings – about 6 percent of state revenue. Wall Street looks at a state’s reserve when deciding its credit rating.

Democrats, outnumbered in the Legislature, said the budget does not spend enough on education after cuts were made by Snyder and majority Republicans in 2011. They also said Republicans should have considered giving tax relief to people after raising individuals’ taxes for the 2012 tax year and beyond.

“They’re balancing it on the backs of middle-class families,” said Rep. Rashida Tlaib of Detroit, the top-ranking Democrat on the House budget committee. “Right now I’m constantly hearing about school districts not being able to do transportation services because they don’t have enough money. … It shouldn’t be roads before kids.”

Snyder defended against criticism, saying that when factoring in all K-12 funding – including the state helping districts more with retirement costs – spending from state resources has gone up $632 per pupil over three budget years. He said federal stimulus dollars dried up but were always intended as one-time money.

The governor exercised two line-item vetoes.

He nixed $1.5 million in funding to explore putting barriers at crossings along a higher-speed rail line in southwestern Michigan, and another $300,000 for a pre-college engineering. Snyder said spending for train crossing technology was unnecessary in part because a broader transportation funding package has not been approved.